Heather H. Evans

Topics: Management, Morgan Stanley, Harvard Business School Pages: 5 (1079 words) Published: July 23, 2009
Heather H. Evans (H.E.) graduated from Harvard Business School in June, 1983. She showed considerable interest in the fashion industry, having some background in this area. She was a fashion model from 1975 through 1979 and, in the summer of 1982, she worked for Jackie Hayman, Inc., as an assistant to the President of this young firm that manufactured designer clothing. An additional valuable asset was that she worked as a financial analyst for Morgan Stanley & Co, Inc. from 1979 through 1981 dealing with mergers, acquisitions and corporate finance. Her father is an attorney with a Wall Street firm. H.E. graduated from Harvard College in 1979, earning her bachelor’s degree in Philosophy. Her previous career as a model gave her a taste of running her own business, experiencing independence, the ability to travel and the opportunity to meet people. She was confident that she could run a dress company and her goal was to create a company to manufacture women’s designer clothing to sell high-priced, high-quality dress-and- jacket combinations to executive women, aged 27 to 45.

Raised $250,000 for 40% of equity from friends and HBS classmates. •Gave company 3-year royalty free license on her name.
Gave investors a “put” on their stock at a multiple of earnings in years 3 and 4. •First line sold well -- She used contacts for “free” publicity, etc. •First line did not sell through, she could not sell second line. •She would have been successful if designs had sold!

Heather’s Opportunity
Appears attractive, good fit between skills, desires and market needs. •What does Heather have to do to capitalize on opportunity? oProduce designs consumers want
oLine up retailers and advertising support
oGet items produced and delivered on time
What are advantages of opportunity?
oLittle capital needed
oGood market niche: Unserved, fragmented, and growing
What are key factors for success?
oDesign sense
oAbility to sell retailer design
oGeneral management
oAbility to manage cash, production, delivery, and quality
What is the upside?
oVery high!
oLiz Claiborne public value of $661 Million
oLicensing of name a big dollar plus with no additional cost oLots of expansion potential in “niche”
oCosts of operations mostly fixed
What is the upside?
oDon’t need to control --Production--Cutting, Sewing, Shipping, infrastructure built up in industry to allow people to do just what she is doing. oLow working capital need
What is the downside?
oPossible risks include:
• Will her designs sell?
• Successful designs will be “knocked-off.”
• Heather’s ability to design for 5 seasons, 20-30 designs per season •What could Heather do to reduce the design risk?
oHire a proven designer.
oDo some market research.
Heather’s Efforts
Built up expertise in industry:
oModel; Summer job with Jackie Hayman.
oChose Market segment that matched her background: Morgan Stanley and HBS. Both feed into “professional women’s” segment. •Spent a great deal of time starting business:
oAt expense of school
oLots of research, talking to retailers, office space, etc. oUsed field study effectively
oSpent lots of time on business plan
Built momentum. When business plan out, she had already: oIncorporated
oHired and paid Belinda Hughes
oDesigned a line
oArranged for a factor
oPaid rent / found building
oReserved production capacity
All of Heather’s actions builds:
In investors’ eyes (contrast with First Place & Ice Delights) oHeather’s Efforts
Was flexible - kept eyes and ears open:
oWorked with Robert T. Vin, then abandoned him -- Saw would not work out oUsed phone to check up on Barbara Tarpe.
oSeized opportunity when 550 7th St. space opened up.
Used support for key areas (see field study plan):
Used existing contacts:
oMorgan Stanley
Depended too...
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